The Blockchain App Stack

The relationship between protocols and applications is reversed in the blockchain application stack. Value concentrates at the shared protocol layer and only a fraction of that value is distributed along at the applications layer. It's a stack with "fat" protocols and "thin" applications.

We owe many of the innovations that we use every day -- from our favorite longstanding websites to the latest mobile applications -- to the existence of underlying highly technical protocols. Endusers don't need to understand these any more than drivers need to understand the...

My friend Steven Johnson has penned a long and wonderful piece exploring what lies beyond the speculative market in crypto tokens.
This essay, which will run in Sunday’s New York Times Magazine, but is online now , could not have come at a better time.
All most people know about Bitcoin, Ethereum,...

The CEO of Coinbase , a company that I am on the Board of, wrote a note to all of their customers on Friday. That note, which he also posted to his blog , urged caution in the trading of crypto assets such as Bitcoin and Ethereum.
This is a quote from that note:
Over the course of this year we...

One of the objections against crypto currencies has been their volatility. Bitcoin for instance just rose by about 60% over 2 days only to then fall by about 15% in a matter of hours. Steam just ended bitcoin support citing volatility . This has led a number of teams on the quest to create a so...

Un-Super-Vised I’ve been beating the drum on digital pets and economies of scale for digital assets for a while at USV. I really thought (and still think!) that would be the killer use case for Augmented Reality. Alas, AR has been pushed aside to make way for its hotter and more elusive cousin,...

This is a conversation between two friends of mine; Chris Dixon , partner at Andreessen Horowitz, and Fred Ehrsam , co-founder of Coinbase.
It is excellent. I highly recommend it, particularly for those that want to make sense of crypto and what is happening in this market.

Some companies with currently centralized services have been criticized for issuing tokens and raising money in ICOs. There are even allegations that venture investors are pushing companies to do so as a ploy for liquidity. I suspect that some situations like that do actually exist, but I know from...

Our portfolio company Kik is doing a token offering for its Kin crypto token this coming week.
AVC regular William Mougayar interviewed Kik founder/CEO Ted Livingston a few weeks ago and their talk is the video of the week this week.

Regulators in China imposed a blanket ban on ICOs over the long weekend.
A number of people have reached out to me via email and Twitter asking me what I think about this.
I think regulation of ICOs is inevitable and a good thing if done right (ie lightly).
The SEC’s comments on ICOs back in July...

As has been widely reported, China has banned all ICOs . Given the torrid pace of ICOs in China, many of which appear to be downright scams, this should not come as a surprise. What will be interesting to see though is what comes next. Here are some key questions.
First, is this a temporary ban...

A lot of financial processes require multiple signatories, like a wire transfer for example. That adds a level of security and comfort to a process that moves a lot of funds quite quickly.
So it makes sense that blockchain technology would find a way to mimic that in software.
It is called a...

Given the explosive increase in the prices of crypto assets this year, there is a growing discussion on how to value them.
This is a very good thing.
Andy Kessler weighs in on the topic in this WSJ piece which was published over the weekend.
You should go read the piece as it does a good job of...

As has been widely reported, in the last few months ICOs have raised significantly more money for blockchain startups than has come from traditional venture investors. This can be seen as a sign of the long discussed unbundling of venture capital. The idea is that while VCs bundle capital, advice,...

Many projects these days have a private fundraising event that precedes any public token offering. These take varying forms, including investments in corporations and some type of SAFT (Simple Agreement for Future Tokens). Fueled by a lot of demand, the terms of these raises have become more and...

A lot of founders / teams have been asking if they should be adopting a cryptocurrency strategy. This is understandable given the frenzy of fundraising recently and the ongoing dialogue about the potential for cryptocurrencies as an alternative business model for web platforms .
As “traditional”...

I got this question on Twitter yesterday:
Are there any parallels you can draw between ICOs and private investment rounds?
— Daniel Olshansky (@olshansky) June 13, 2017
And I responded with this:
Yes, buyer beware. Do your homework. Don’t be greedy.
— Fred Wilson (@fredwilson) June 14, 2017
I...

The problem of finding an optimal structure for a token sale is quite difficult.
For starters, the objectives between teams and investors are potentially different. Furthermore, these are not homogenous groups. Teams vary widely along at least two dimensions: intent (from get rich quick to change...

I remember back in 2011 when I first learned about Bitcoin, we started talking about the technology and the model internally at USV. My partner Albert had done a lot of reading about it and he raised the 21mm hard cap as something that had both pros and cons associated with it.
Ever since then I’ve...

In an information sessions for Congress, Peter Van Valkenburgh used my favorite analogy comparing crypto tokens to tickets at a fair ground. And William Mougayar has a new post about tokens where he specifically refers to them as “privately issued currency.” No matter how you think about tokens,...

Chris Dixon put this reading list together.
Instead of reading something from me today, maybe everyone can pick one or more posts from Chris’ reading list and learn a bit about tokens.
I believe I have read all of these posts over the past year or so and I agree with Chris that they are all quite...

I realize this blog is dangerously close to becoming A Coin Fund instead of AVC, but what can I say? It’s what I am thinking about most of all right now.
Here’s William’s interview with Ted Livingston, founder and CEO of Kik, on the plan to decentralize Kik around a new token called Kin.
USV TEAM...

One thing that’s interesting about yesterday’s Basic Attention Token sale is how quickly it went – $36M transacted in 30 sec.
Lots of people were surely disappointed as they attempted to buy into the token sale only to have their orders canceled for missing the sale window.
I haven’t nailed this...

The Brave browser team concluded an ICO for their Basic Attention Token yesterday in about thirty seconds. This led to this tweet:
The Basic Attention Token (BAT) ICO just raised 30 million dollars in 24 seconds. VC’s didn’t even have time to put on a sweater vest.
— briantobal (@briantobal) May...

In case you missed it, today Brave raised $36M for the Basic Attention Token . They had allocated 30 days for the token sale, but sold out of 1B BAT in 24 seconds.
The Basic Attention Token (BAT) ICO just raised 30 million dollars in 24 seconds. VC’s didn’t even have time to put on a sweater...

William and I did the wrap-up at the end of Token Summit.
Here is the video of it:
And here is CNBC’s take on it .
I’d love to know if you all think she captured my views accurately.
I don’t think so and tweeted this when I saw her piece.
sometimes i read a reported piece and i think “how did...

Our friends Balaji and Naval penned a really nice primer on crypto-tokens.
AVC readers have been hearing me talk about this new form of business model and fund raising mechanism for a while now and so it won’t be new to all of you. But even so, I think the way they lay it all out is really well...

I spent a bunch of time at Consensus and Token Summit this week. If it wasn’t clear before, we are headed into a crypto currency bubble. Now a bubble isn’t in and of itself a bad thing. In fact almost every wave of technology has brought with it a financial bubble phase (eg care for Railway Mania in...

It appears that regulators are looking into ICOs, the Initial Coin Offerings by which many projects are raising financing at the moment. Regulators are rightly concerned with people losing money in speculative projects that fail to deliver or worse yet in outright scams. As regulators think about...

I became interested in Bitcoin reasonably early and was fortunate to invest in some early mining (although as with all good investments in retrospect not nearly enough). There is currently a fight brewing in Bitcoin world with the possibility of a hardfork a la Ethereum into two different...

With the release by Wikileaks of the so-called Vault 7 CIA Hacking tools, the debate has once again turned to the effectiveness and role of encryption. As Zeynep Tufekci (you should absolutely follow her on Twitter) rightly points out, this is all about endpoint security and not about broken...

There is a lot of cutting edge computer science being used in blockchain technology and, because there are multiple blockchains and protocols being proposed and tested, there are various experiments going on at the same time. This is all very good in my view. We will eventually figure out which...

The blockchain and its evolving ecosystem and community (Joel and I called it “True Believers” the other day) are a wonderfully smart, intense, focused, weird, open, fun group of people. Almost across the board. Some are capitalists, some may not be capitalists, some cannot figure out which way to...

One of the key criteria for the longterm success of any computer system would seem to be stability. For instance, if there is an app that crashes your phone you will use it less or even uninstall it. While it is frustrating when this happens, it is quite amazing that computer systems have any...

HTTP as the underlying protocol of the web allows for decentralized publishing. Anyone can operate a web server and publish their own content. And anybody with a web browser can access that content (subject to governments and ISPs imposing limitations). But as a stateless protocol, HTTP needs a data...

Imagine a global database (or a set of global databases) that every application plugs into. That’s the general idea behind the Shared Data Layer. As the name suggests, it’s a data storage layer that is decentralized and open to everyone.

The first thing Brad taught me when I joined Union Square Ventures is that one of the greatest things about working in the Venture Capital business is that you get to look at markets from a very different vantage point. Every day, we have the privilege to learn what the future is going to look like...

Zander, Joel and others have been building this hackpad market map of alternative blockchains.

Alexander Pease — August 1, 2014

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